Accused Kelihos botmaster's former employer 'angered' at revelation

A security-related company that until late December employed the Russian developer who allegedly created the Kelihos botnet said today it was "extremely disappointed and angered" at the revelation.

Returnil, which sells the Virtual System Pro program, confirmed Wednesday that Andrey Sabelnikov had worked in its St. Petersburg office until Dec. 21, 2011.

The company's software clones an existing copy of Windows in a virtual machine as a way to protect users from malware.

"We are extremely disappointed and angered that someone who was a member of our team could be implicated in this type of activity," Michael Wood, Returnil's vice president of product management, said in an email reply to questions posed Tuesday.

Sabelnikov was accused Monday by Microsoft with creating the malware used to build the Kelihos botnet, and of commanding the army of compromised computers to send billions of spam messages daily.

In a revised complaint filed Monday in a U.S. federal court, Microsoft said it had identified Sabelnikov after analyzing the malware used to infect, then direct tens of thousands of PCs. "The harmful computer software used to control the Kelihos botnet contains information that identifies Defendant and demonstrates that Defendant created, operated and controlled the Kelihos botnet," the amended complaint said.

According to Sabelnikov's LinkedIn account -- which was drastically pruned yesterday -- he worked for Returnil from November 2008 until December 2011 as a lead research engineer.

Wood acknowledged that the timeframe was correct, but disputed Sabelnikov's title, saying instead that he was a "general software engineer" who worked on a "small malware analysis side project."

Sabelnikov resigned from his position with Returnil on Dec. 21, 2011, said Wood.

"He left of his own volition to pursue other opportunities due in large measure to the project he was working on being terminated," Wood said, noting that the project had been canceled because it had failed to produce results.

Prior to working at Returnil, Sabelnikov was employed by the Russian antivirus company Agnitum from September 2005 until November 2008. On Tuesday, Agnitum confirmed that Sabelnikov had held several positions with the company, ending as a project manager.

Sabelnikov's LinkedIn page claimed that after leaving Returnil he worked for Teknavo, a consultancy that, among other things, develops software for financial organizations. Teknavo has an office in St. Petersburg. It has not replied to Computerworld's request for confirmation and comment.

It's possible that Sabelnikov had access to malware source code at one of his former employers, then used that code to craft Kelihos, a security expert said today.

"[All security companies] go into malware forums and try to listen in," said Chet Wisniewski, a security researcher at U.K.-based vendor Sophos. "It's not uncommon that we discover [malware] source code on a command-and-control server."

As Wisniewski mentioned, security researchers often do reconnaissance by posing as malware writers on underground message boards, forums and websites to gain real hackers' trust and then mine those sources for information.

It's the computer industry's version of a police officer going undercover. "So we do come across source code in the line of duty," said Wisniewski.

If Sabelnikov did have access to the source code of Waledac, another spamming botnet that Microsoft has tried to kill with a court order, it could tie him to Kelihos, since security experts have noted similarities in the code and operation of both Waledac and Kelihos.

Wisniewski said Sophos believes Waledac's source code was used by more than one cybercrime gang to build variations on the original malware.

Microsoft did not specify when Sabelnikov allegedly created the Kelihos malware, but security firms discovered it in late 2009, when he was working for Returnil.

Wood distanced Returnil from its former employee.

"Our mission is one of combating malware in all its forms and for anyone involved in such an endeavor to be responsible, if proven, for creating, maintaining, and distributing the very thing we have committed ourselves as individuals and as a company to combat, is both disturbing and repugnant to say the least," Wood said.

Microsoft has promised to continue its investigation of Kelihos.

"Microsoft is committed to following the evidence wherever it leads us through the investigation in order to hold Kelihos' operators accountable for their actions," said Richard Boscovich, a senior attorney with Microsoft's Digital Crimes Unit, in a Monday blog.

Sabelnikov has not replied to a request for comment on Microsoft's charges.

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